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Malaysia has, for a young country, already quite an history of building its own ecosystem, as it opened its Multimedia Super Corridor back in 1997. Now is the time – and it’s also the case for neighboring Singapore – to reach another stage, one characterized according to many by significant successful exits, so that people can put a popular name on a country or city, and know it is a successful innovative ecosystem.

To discuss this topic, the Global Entrepreneurship Summit invited two globetrotters and a local Malaysian insider.Bowei Gaiâ€Ž, founder of the World Startup Report, visited 26 countries in 9-months of travels and produced very popular Slideshares on each of them. Bjoern Hermannâ€Ž, founder of Startup Compass, is also known for his Startup Genome report that ranked innovation ecosystems across the world. Nazrin Hassan, founder of the Cradle Fund in Malaysia, an early stage investor in startups, has long worked in government agencies on the topic of innovation.

The top 20 innovation ecosystems in the world (Startup Genome)

The “recipe” for an ecosystem willing to take a step further would involve different items, tools, and changes, according to them.

First, self-confidence. Silicon Valley is still the only known ecosystem in the world (ask around yourself which is the 2nd best, you will struggle to agree on one). Asia, says Nazrin, needs to speak for itself, to showcase its history, successes, failures, identity. Benchmarking with the Valley makes no sense, and Malaysia should rather compare and progress with same-size or neighboring ecosystems, such as Singapore or Honk-Kong. And it’s not so much about competition between ecosystems than connection, in this sense, Malaysia could positively work with Singapore as a platform to reach to the global markets.

Opening Malaysia to the world seemed to be another key component. In the Silicon Valley, half the founders and 70% of PhD are foreign-born immigrants. Israel is ranked highly in entrepreneurs’ minds also for its capacity to link with New York, the Silicon Valley or Europe for its own startups. The immigration dilemma, characterized by the visa policy tensions in every country in the world, seems to be the post sensitive issue. The Singapore startup ecosystem, often referred to as the perfect textbook case study, is now facing a rising anger from local people who see top jobs and government money go to attracting foreign entrepreneurs. But for sure, you can’t build an ecosystem with only local people, as innovation stems from diversity, disruption, different influences, networks and connections.

Bowei & Bjoern, respectively documenting and comparating startup ecosystems in the world

The role of the government should also be defined better. Having worked for 13 years at different level of the government, Nazrin wonders if it should be a leader, or a feeder. The panelists agree that government and its agencies should create the conditions for a successful ecosystem (see what Malaysia PM Najib Razak told in the opening keynote of the GES), and then leave it to entrepreneurs. The legal, tax and education framework can be adapted to entrepreneurship. For instance, universities should be more opened to private companies, to expose students to successful entrepreneurs. Another hint would be to improve wages for developers, as in Malaysia, developers earn 5.600RM/month ($1750) much lower than jobs in the media, construction.

Making and keeping people hungry is another necessity. The Israel startup ecosystem is often mentioned: a nation under siege, in a sea of what they see as enemies, and the leading role of the army as both a training for the youth and a key funder for research and development. Malaysia may seems “too lazy”, says the panel, and needs to find its own “enemy” to raise the competition mindset of its entrepreneurs. And if there’s no one hungry in the country, import hungry people, this is what Chile does very well with its Startup Chile program. Any foreigner with an idea can apply for a $50 000 grant and a visa to launch its project in the country. “It’s a cheap way to drive an ecosystem”, adds Bjoern.

Malaysia success stories

But overall Malaysia is on the good end, with a supportive government. As our panelist conclude, try to get through the paper work in India, or corruption issues in Indonesia, to understand how better the situation is in Malaysia. We’ll be covering other innovation ecosystems this year to deepen our understanding of their mechanisms, best practices, and how to connect them one with each other, stay tuned.

Interesting article. Malaysia has a huge potential for driving innovation in South East Asia, I hope the recent race clashes won’t be too detrimental to the health of the economy. The brain drain of the local minorities is pretty important.

Yes, I have a link problem on this template, can’t figure out why/how >_< And Yes, the brain drain from minorities is a real challenge from Malaysia. I’ve met in at least 3 countries Malaysia from Indian descent who just left the country because they didn’t have any chance to be recognized as entrepreneurs…